Wednesday, January 21, 2009

Current Economic Issues in Baseball

When I was in transit over the past couple of weeks, I had the opportunity to sit down and write up a response to some of the economic troubles that the common fan brings attention to with baseball. These opinions come on the heels of large December spending and increasingly expensive ticket prices. Common fans do not like to see these two combine and when they do, their pessimism is hard to respond to. In a time where the entire country has felt the recession to an extent, fans are more deterred than ever. Baseball is an escape from the negativity of the world and I don't expect that to change, though perhaps the way that fans access the game may drastically change.

The future of baseball and all of the entertainment industry moneymakers is successful use of media and new media. I have tried to give myself a glimpse into this by blogging and learning how online networks grow. The development of strong fan connections can be made through building a bridge from the team to the fans. Player participation in blogs such as Curt Schilling's "38 Pitches" became a huge hit in the Boston area and with other dedicated fans by giving them an opportunity to interact with the pitcher. Now front-office staff members blog, chat online with fans and make public appearance to help increase communication. This area is something that is going to explode once teams figure out a way to get players with star power to maintain communication with new media outlets. Minor League teams will also use new media, but in vastly different ways as the team itself, not the players, is what the fans identify with. By going out into communities with marketing street teams and perhaps blogging by team officials or members of the coaching staff, communities can become more familiar with their teams.

A current issue in baseball according to the average sports page reader is that salaries of players are soaring above acceptable rates. With players receiving average salaries over 3M and several free agents signing contracts this offseason that will pay the player in excess of 20M per season, I can see how people would deduce that there is a problem (I used to agree as well -- Until I read Marvin Miller). However, the teams and players have come very close to balancing the share of the revenue stream. At an average of 3M, the 750 MLB players earn 2.25B in total. It is estimated that the league earns around 5B in revenue now, so the league and the players are very close to splitting revenues evenly, which is the ideal situation for a fair league and players union. Where fans are right is that teams continue to attack the average consumer's wallet with pricing. In 2009, I would have to imagine that teams will show their rates of ticket inflation because of current economic conditions. Teams not in Boston, New York, Chicago or Los Angeles will probably see a decline in gate attendance, season ticket holders and corporate accounts. Smart teams should consider price changes now to favor consumers and businesses who may not be able to afford multi-million dollar suites in 2009. This is certainly a current issue that will have to be solved through pro-active pricing schemes. Minor league baseball may reap the benefits of this situation in the MLB with more people choosing to go to the cheaper game closer to home.

A former issue that appears to be getting solved is that of competitive balance. Even though the Pittsburgh Pirates and Kansas City Royals have put together one winning season combined since the 1994 strike, there have been plenty of examples of small market teams finding success in spite of big spending teams. Credit the Brewers, Rays and Twins for being playoff caliber franchises in 2008, when the Mets, Yankees and Braves were not. Baseball is now run by executives that are constantly under close surveillance with success being measured almost exclusively by the wins and losses from year to year. It takes a strong mind and desire for success to win now and the Rays, Brewers and Twins used innovation in their resources better than the Mets, Yankees and Braves in 2008. Truly, winners are determine by two things in the modern era of baseball: (1) bankroll; and (2) capacity of the organizations leadership. When the "Blue Ribbon Panel" discussed competitive balance in preparation for the 2002 Basic Agreement, bankroll determine winners in post-strike baseball. Between 1995 and 2001 the New York Yankees played in the World Series five of the seven series, winning four of them. Parity was at an all time low. By creating tax thresholds and a substantive revenue sharing system in the 2002 Basic Agreement, the MLB gave some spending power back to small-market teams. At the 2006 update to the agreement, the tax thresholds were increased and the revenue sharing percentages dropped 3%. In my mind, this hits small market franchises hard, as teams like the Yankees stand to benefit as much as 20M from the 2002 agreement and the 2006, while the Pirates or Royals lose out on 5-7M. By general observation, this allows the Yankees to sign Mark Teixeira and it keeps the Royals from signing a useful bat to help their anemic power from 2008. The true spirit of the game is to have winners based on the ability of management and in order to keep that, the MLB must not lower revenue sharing percents again.

Overall, baseball is in great position now that they have passed the steroid-era. Looking ahead to a future far less clouded than other professional sports is another big plus (NFL -- Player's Rights; NBA -- Globalization of the game, players leaving to play in foreign markets; NHL -- Re-Establishing a fan base and solving collective balance problems) for baseball. I have extremely high hopes that 2009 will bring cost conscious clubs continued success and that consumers still can to come out to the old ballgame.

Monday, January 19, 2009

Getting a Job in Baseball

I figure that it is time to write an update with respect to my professional development as this blog is intended to shine some light as to how young professionals can get into Major League Baseball using my anecdotal stories as an example.

The Waiting Game

I recently went on a two week vacation to Egypt and the Dominican Republic. When I left, I had no job offers, few leads and no reason to feel hopeful that anything was coming. Yet I still had the feeling that when I checked my phone each night for messages that I would have good news. Before going to sleep in a timezone that was 7 hours ahead of the east coast, I would turn my cellphone on for five minutes to try and catch a signal to see if I had voice messages. The nerves making my stomach turn over each day that I either did not receive a message or there was no signal for the phone to pick up as we sailed along the Nile. After returning to Cairo, where cellphones work with ease, the message finally came through to me on January 7th that the Atlanta Braves wanted to speak with me about their position as their marketing trainee. I quietly celebrated, thinking that this was going to be it. This was one of the positions that I held in high regard after working with the Braves during the summer of 2008 and also considering the great interviews and conversations that I had with Braves personnel. While walking through the great Giza Pyramids, one of the wonders of the world, my insides were in knots (not only because of Egyptian food) yearning for home so I could get in touch with the Braves. Even on the plane ride, I could not let my mind rest to allow me to sleep. Each thought ended at the gates of beautiful Turner Field. When I finally arrived back in the United States, it wasn't 5 minutes after getting through U.S. Customs that I called Hill Scott, the director of marketing for the Braves. The phone rang, each sonorous tone a dagger to my insides, eventually rolling to voicemail. I suppose, what was another 12 hours after having already waited 48 to make the phone call, though at the time I felt that it was an eternity.

The Phone Call Finally Arrived

The next day, January 10th, I received a phone call at around quarter after one from a private number. It was the Braves! While driving on the Merit Parkway in Milton, Connecticut, Mr. Scott was ready to offer me the marketing trainee position. I just about ran the car off the road in joy and immediately celebrated by calling my parents to share the news. By 5:00PM that night, I was an Atlanta Brave Trainee.

The Next Chapter

This means that I now will have work in baseball for 10-11 months, spanning from the present until November at some point. There will be no guarantees' after that time, just a year of experiences and learning the business of baseball from one of the great organizations in baseball. It is not exactly what you would like to receive from a $160,000 education, but it is what it takes to work in baseball. For all of those who are reading this looking for sage advice about getting into baseball, you need to be very resilient. It takes a passion for the sport and courage to follow the dream to work in sport to make the low pay and poor living conditions worth while. I plan to make Turner Field my second home in 2009, which is what makes everything worth it. I am ready to dedicate hours and all of my energy to the 2009 Atlanta Braves marketing department and hopefully that will pay off in a full time position at some point in the future with the Braves or another organization. Thanks to the support of my family, I will be able to do this. Without them, there would be no way that I would have been able to make this work. This week, I embark on a new chapter of my life and I can't wait to write each page. The goal to make it to Baseball Operations is still there, it just appears as though it will take longer to achieve than anticipated. Being in a front office to a Major League Baseball team is close enough for now.


Thank you to all of those who are reading this. Your support and friendship is a large reason as to what has pushed me to reach for the stars.